Article by Jamie Mackenzie Smith - 23rd November 2021

Do I Have A Default? How To Find Out

For lots of lenders, coming across a Default on your Credit Report is a troubling sign. It’s certainly more serious than a missed payment or arrears on your file, which are less likely to seriously hurt your approval chances. A Default represents a key moment in the eyes of a lender: it shows that on a previous credit agreement you stopped being a borrower and became a debtor.

The difference between a borrower and a debtor might seem subtle, but to a potential lender it demonstrates that you are much more likely to default on any new credit you might take on, making you seem a less attractive customer.

If you have been issued a Default at any time in the past six years, it should appear on your Credit Report. Any Defaults that are older than this will have dropped off your report, and no longer hurt your Credit Score or ability to take out credit.

To see whether you have any Defaults, as well as their status and balance, you can check your Credit Report for yourself. checkmyfile is the UK's most detailed Credit Report, with data from Equifax, Experian, and TransUnion making it quick and easy to check everything you need. You can try checkmyfile free for 30 days, then for just £14.99 a month afterwards.

How do Defaults end up on a Credit File?

Before you can default on a credit agreement, you will first need to miss a certain number of payments – you won’t be given a Default immediately following a missed payment. This can vary from lender to lender, but in many cases six months’ worth of arrears need to be accumulated before a Default is lodged on your Credit Report. Warnings will be issued well in advance of this, as lenders will want to work with you, not against you, to try getting your account back on track, but when all else fails, they won’t hesitate to formally issue one.

Before a lender can lodge a Default against you, they legally have to serve you a Notice of Default detailing any and all amounts owed, giving 14 days to pay the debt. You can either pay the amount or dispute the case with the lender if you believe that you do not in fact owe the sum they’re claiming. If you do neither of these things, you will automatically be issued a Default.

In rare cases, if a Default has been issued as a result of fraudulent credit activity, there is a chance that you might not receive the Notice of Default, if the criminal has managed to set up the account at a different address. If this is the case, you may only find out about the Default and the fraudulent credit usage when you come to check your Credit Report.

What happens next?

Once you’ve been issued a Default, that’s far from the end of it. Until you pay the lender the sum they’re claiming for, you will still owe them that amount (unless you can prove unequivocally that the debt doesn’t belong to you). If you don’t take steps to clear the debt, lenders are able to apply for a County Court Judgment to be issued against you in a further attempt to reclaim monies owed.

When applying for credit, a Default will limit the number of potential lenders that would consider your application greatly, but having a CCJ on your Credit Report will significantly reduce that number further. Not only that, but because court judgments are public records, they will be visible on the checks carried out by landlords and employers, and in some cases can impact insurance quotes given by comparison sites as these also use credit searches.

How does a default appear on my Credit Report?

You can check for the presence of any Defaults on your checkmyfile Credit Report under Payment History, alongside the payment history of each individual credit account reported in your name. A Default appears as a D marker, and any arrears that lead to the Default will appear as 1, 2, 3, 4, 5, 6 respectively.

How a Default affects your Credit Score

A defaulted account is likely to have a severe negative impact on your Credit Score for the entire time it is active on your file.

When a Default drops off from your Credit Report, you might find your Credit Score increases as a result. While you shouldn’t base your idea of your creditworthiness on your score alone, it does effectively show how positively a lender might view your application.

How to remove a Default from a Credit File

Like most other pieces of information that are recorded on your Credit Report, if a Default is accurate, it is unlikely that you will be able to remove it. That’s because the lender has a legal obligation to report your information as accurately as possible for any future potential lenders to find. As Defaults are so serious, it is in other lenders’ best interests to be fully aware when one or more has been issued.

Defaults will be automatically removed from your Credit Report six years after the date of first being recorded, so patience may be your only solution for getting rid of it.

It is a common misconception that fully paying off a Default will cause it to be removed from your Credit Report. Settling any outstanding defaulted balance will mean that the lender should mark the account with a £0 balance, but the Default marker itself will still remain on your Credit Report for the full six-year period.

You’re also unlikely to see any significant change to your Credit Score after paying off a defaulted account. It’s the Default marker itself that hurts your Credit Score, rather than the outstanding balance. That said, fully satisfying a Default will prevent the lender from taking court action to reclaim the owed amount. A County Court Judgment is even worse for your Credit Report, so paying off a Default can protect your Credit Score from further damage.

Thankfully, as long as you manage to maintain the rest of your credit accounts well, once a Default is removed from your Credit Report, you’re likely to see your ability to get new forms of credit improve straight away. You can see the exact date that a Default is due to be automatically removed by checking your Credit Report.

What do I do if I have an incorrect Default on my Credit File?

If a Default is correctly recorded on your Credit Report, then it will remain for the full six-year period, as mentioned above. However, if you find an incorrectly reported Default, then you can dispute the data it to have it corrected.

If you have an incorrect Default on your Credit Report, it is best to contact the lender that is reporting the data to request they amend their records. They should fix their mistake and then share the new, correct information with the Credit Reference Agencies (CRAs), where your Credit Reports will be updated.

As lenders typically share new information with the CRAs on a monthly basis, it may take your lender up to six weeks to make this change – but ultimately this will depend on that particular lender’s reporting practices.

Lenders are legally required to share only correct information with the Credit Reference Agencies, so they should be able to amend any errors without problem. If you encounter trouble, you can escalate your query to a formal complaint.

How Do I Check My Credit Report Information?

Our Multi Agency Credit Report is the most detailed credit checking service in the UK, with data from Equifax, Experian, and TransUnion all on the same, easy-to-use platform. This makes it quick and easy to check your information – including any Defaults – with all the Credit Reference Agencies.

If you haven't already, you can try checkmyfile free for 30 days, then for just £14.99 a month afterwards. You can cancel online at any time and you'll get full access to the UK's most detailed Credit Report for the duration of your trial.

Updated by Sam Griffin on 23 November 2021

The UK's First Provider Of Online Credit Reports

Launched 25 Years, 35 Million Credit Scores & 8 Million Credit Reports Ago

The UK's First Provider Of Online Credit Reports

Article by Sam Griffin

4th November 2021

Closing A Credit Account — Why Did My Credit Score Drop?

It’s inevitable that you’ll close a credit account at some point — perhaps after finally clearing your mortgage or if you just want to change mobile phone provider. Because of this, we get loads of questions about closing accounts, and what that means for Credit Scores.

Read More

Article by Paul Anderson-Riley

18th August 2021

How To Download And Print Your Credit Report

There are several different reasons you might need to print or share a copy of your Credit Report, such as assisting a mortgage advisor during an application, showing a specific entry to a lender, or even just to keep a physical copy for your personal records.

Read More